Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5086268 | Japan and the World Economy | 2011 | 6 Pages |
Abstract
We illustrate a differential oligopoly game using the capital accumulation dynamics à la Ramsey. We evaluate the effects of profit taxation, proving that there exists a tax rate yielding the same steady state social welfare as under social planning. Contrary to the static approach, our dynamic analysis shows that, in general, profit taxation affects firms' decisions concerning capital accumulation and sales. In particular, it has pro-competitive effects provided that the extent of delegation is large enough (and conversely).
Related Topics
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Economics and Econometrics
Authors
Massimo Baldini, Luca Lambertini,